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What an Alberta investor tax credit will mean for businesses

It should help remedy Alberta’s standing with venture capitalists

Jul 8, 2016

by Alberta Venture Staff

The availability of venture capital is a crucial element in any business ecosystem. Venture capital provides emerging companies with early stage funding they can’t get elsewhere and more established ones with the financial resources they need for a round of R&D, manufacturing or marketing before they have the cash flow to cover it themselves. The best venture capitalists also bring technical and business expertise to the table.

So it’s disappointing to see the sorry state of venture capital in Alberta. The Conference Board of Canada recently reported that Alberta sees venture capital investment equal to a measly 0.045 per cent of its GDP. The U.S. sees 0.173 per cent and the province with the most VC investment – B.C. – sees 0.157. Overall, Canada, led by B.C., Ontario and Quebec, gets a “B” grade. Alberta struggles along with a “D.”

Some of this is because so much of Alberta’s GDP comes from oil and gas investments by large companies that are way past the venture capital stage. But it was still welcome news in April when the provincial government introduced a 30 per cent investor tax credit if capital is provided to small- and medium-sized Alberta businesses in IT, clean tech, health tech, interactive digital media and game products, and post-production, visual effects and digital animation.

Applications will be accepted starting in January, so entrepreneurs seeking venture capital, start your engines.

09-capital-req-story
Venture Capital Investment
2012-2014 (provinces and Canada), 2012-2013 (U.S. and Int’l)

(percentage of GDP)
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One Response to What an Alberta investor tax credit will mean for businesses

  1. Too bad its only eligible for a select minority of businesses depending on their sector. Huge constraint that won’t help the massive majority of entrepreneurs and businesses wanting to grow and expand.